UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ________to________
Commission File Number: 0-23636
EXCHANGE NATIONAL BANCSHARES, INC.
(Exact name of small business issuer as specified in its charter)
Missouri 43-1626350
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
132 East High Street, Jefferson City, Missouri 65101
(Address of principal executive offices)
(573) 761-6100
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past
90 days. [X] Yes [ ] No
As of August 4, 1997, the registrant had 718,511 shares of common stock,
par value $1.00 per share, outstanding.
Transitional Small Business Disclosure Format:
[ ] Yes [X] No
Page 1 of 28 pages
Index to Exhibits located on page 27
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
EXCHANGE NATIONAL BANCSHARES, INC. AND SUBSIDIARY
<CAPTION>
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
1997 1996
____________ ____________
<S> <C> <C>
ASSETS
Loans, net of unearned income:
Commercial $ 44,914,069 40,208,276
Real estate -- construction 28,188,866 22,737,000
Real estate -- mortgage 77,687,795 76,070,524
Consumer 36,132,987 34,292,925
____________ ____________
186,923,717 173,308,725
Less allowance for loan losses 2,251,021 2,307,068
____________ ____________
Loans, net 184,672,696 171,001,657
____________ ____________
Investments in debt and equity securities:
Available-for-sale, at estimated market value 51,955,973 51,023,834
Held-to-maturity, estimated market value
of $29,990,329 at June 30, 1997 and
$29,659,353 at December 31, 1996 29,875,580 29,599,537
____________ ____________
Total investments in debt
and equity securities 81,831,553 80,623,371
____________ ____________
Federal funds sold 500,000 13,500,000
Cash and due from banks 17,246,238 11,671,641
Premises and equipment 4,602,203 3,341,650
Accrued interest receivable 2,774,045 2,543,421
Deferred income taxes 660,273 649,306
Other assets 963,722 748,389
____________ ____________
$293,250,730 284,079,435
============ ============
</TABLE>
Continued on next page
<PAGE>
<TABLE>
EXCHANGE NATIONAL BANCSHARES, INC. AND SUBSIDIARY
<CAPTION>
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Unaudited)
June 30, December 31,
1997 1996
____________ ____________
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits $ 36,842,541 32,834,946
Time deposits 194,273,246 195,188,826
____________ ____________
Total deposits 231,115,787 228,023,772
Securities sold under agreements to repurchase 14,408,192 12,303,391
Interest-bearing demand notes to U.S. Treasury 3,597,552 1,034,432
Accrued interest payable 1,042,204 1,008,681
Other liabilities 1,125,935 1,027,857
____________ ____________
Total liabilities 251,289,670 243,398,133
____________ ____________
Stockholders' equity:
Common Stock - $1 par value; 1,500,000 shares
authorized; 718,511 issued and outstanding 718,511 718,511
Surplus 1,281,489 1,281,489
Undivided profits 39,995,406 38,696,973
Unrealized holding losses on investments
in debt and equity securities
available-for-sale (34,346) (15,671)
____________ ____________
Total stockholders' equity 41,961,060 40,681,302
____________ ____________
$293,250,730 284,079,435
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
EXCHANGE NATIONAL BANCSHARES, INC. AND SUBSIDIARY
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
_______________________ _______________________
1997 1996 1997 1996
___________ ___________ ___________ ___________
<S> <C> <C> <C> <C>
Interest income $ 5,393,880 4,987,698 10,635,450 9,843,670
Interest expense 2,594,104 2,413,162 5,126,918 4,760,649
___________ ___________ ___________ ___________
Net interest income 2,799,776 2,574,536 5,508,532 5,083,021
Provision for loan losses 175,000 135,000 300,000 225,000
___________ ___________ ___________ ___________
Net interest income after
provision for loan losses 2,624,776 2,439,536 5,208,532 4,858,021
Noninterest income 475,000 454,881 910,179 865,908
Noninterest expense 1,675,521 1,490,270 3,192,878 2,985,451
___________ ___________ ___________ ___________
Income before
income taxes 1,424,255 1,404,147 2,925,833 2,738,478
Income taxes 466,000 458,000 952,000 889,000
___________ ___________ ___________ ___________
Net income $ 958,255 946,147 1,973,833 1,849,478
=========== =========== =========== ===========
Earnings per common share $1.34 1.31 2.75 2.57
===== ===== ===== =====
Dividends per share:
Declared $0.50 0.44 0.94 0.82
===== ===== ===== =====
Paid $0.44 0.38 0.88 0.76
===== ===== ===== =====
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
EXCHANGE NATIONAL BANCSHARES, INC. AND SUBSIDIARY
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
__________________________
1997 1996
___________ ___________
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,973,833 1,849,478
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 300,000 225,000
Depreciation expense 152,680 138,120
Net amortization of debt securities
premiums and discounts 60,112 58,626
Increase in accrued interest receivable (230,624) (242,818)
Decrease (increase) in other assets (215,333) 66,416
Increase in accrued interest payable 33,523 38,072
Increase in other liabilities 98,078 228,362
Net securities losses 2,813 --
Other, net 329,030 (77,489)
Origination of mortgage loans for sale (9,122,831) (12,105,377)
Proceeds from the sale of mortgage loans
held for sale 9,122,831 12,105,377
___________ ___________
Net cash provided by operating activities 2,504,112 2,283,767
___________ ___________
Cash flows from investing activities:
Net increase in loans (15,224,406) (10,035,805)
Purchases of available-for-sale debt securities (5,871,620) (38,074,113)
Purchases of held-to-maturity debt securities (3,992,180) (3,305,524)
Proceeds from sales of available-for-sale
debt securities 362,915 --
Proceeds from maturities of debt securities:
Available-for-sale 3,385,837 23,503,368
Held-to-maturity 2,689,299 1,636,044
Proceeds from calls of debt securities:
Available-for-sale 125,000 1,500,000
Held-to-maturity 2,000,000 200,000
Purchases of premises and equipment (1,446,417) (531,586)
Proceeds from sales of other real estate
owned and repossessions 914,410 644,186
___________ ___________
Net cash used in
investing activities (17,057,162) (24,463,430)
___________ ___________
</TABLE>
Continued on next page
<PAGE>
<TABLE>
EXCHANGE NATIONAL BANCSHARES, INC. AND SUBSIDIARY
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)
Six Months Ended
June 30,
__________________________
1997 1996
___________ ___________
<S> <C> <C>
Cash flows from financing activities:
Net increase in demand deposits 4,007,595 668,379
Net increase (decrease) in interest-bearing
transaction accounts (1,339,131) 2,542,173
Net increase in time deposits 423,551 4,981,909
Net increase in securities sold
under agreements to repurchase 2,104,801 6,540,698
Net increase in interest-bearing
demand notes to U.S. Treasury 2,563,120 1,579,265
Cash dividends paid (632,289) (546,069)
___________ ___________
Net cash provided by
financing activities 7,127,647 15,766,355
___________ ___________
Net decrease in cash
and cash equivalents (7,425,403) (6,413,308)
Cash and cash equivalents, beginning of period 25,171,641 30,057,476
___________ ___________
Cash and cash equivalents, end of period $17,746,238 23,644,168
=========== ===========
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
Cash paid during period for:
Interest $ 5,093,395 4,722,577
Income taxes 1,128,323 946,239
Other real estate and repossessions
acquired in settlement of loans 1,296,030 645,998
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
EXCHANGE NATIONAL BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Six Months Ended June 30, 1997 and 1996
Exchange National Bancshares, Inc. ("Bancshares" or the "Company") is a
bank holding company registered under the Bank Holding Company Act of 1956.
Bancshares' activities currently are limited to ownership of the outstanding
capital stock of The Exchange National Bank of Jefferson City, a national
banking association.
On July 9, 1997, the Company's Board of Directors approved an acquisition
agreement whereby the Company will acquire for cash and seller notes, 100% of
the outstanding shares of common stock of Union State Bancshares, Inc.
(Union), a one-bank holding company located in Clinton, Missouri. Based on
information supplied by Union, at June 30, 1997, the consolidated total assets
and stockholders' equity of Union were $134.6 million and $6.5 million,
respectively. The purchase of Union is expected to close in the fourth
quarter of 1997 and will be accounted for under the purchase method of
accounting. The acquisition is subject to the approval of the Federal Reserve
Bank of St. Louis and the shareholders of Union.
Earnings per share amounts are based on 718,511 weighted average shares
outstanding for the three and six month periods ended June 30, 1997 and 1996.
In June 1996, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 125, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities" (SFAS
125). SFAS 125 provides accounting and reporting standards for transfers and
servicing of financial assets and extinguishments of liabilities based on
consistent application of a financial components approach that focuses on
control. It distinguishes transfers of financial assets that are sales from
transfers that are secured borrowings. Under the financial components
approach, after a transfer of financial assets, an entity recognizes all
financial and servicing assets it controls and liabilities it has incurred and
derecognizes assets it no longer controls and liabilities that have been
extinguished. The financial components approach focuses on the assets and
liabilities that exist after the transfer. Many of these assets and
liabilities are components of financial assets that existed prior to the
transfer. If a transfer does not meet the criteria for a sale, the transfer
is accounted for as a secured borrowing with pledge of collateral.
SFAS 125 extends the "available-for-sale" or "trading" approach in
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities (SFAS 115) to nonsecurity financial
assets that can contractually be prepaid or otherwise settled in such a way
that the holder of the asset would not recover substantially all of its
recorded investment. Thus, nonsecurity financial assets (no matter how
acquired) such as loans, other receivables, interest only strips or residual
interests in securitization trusts (for example, tranches subordinate to other
tranches, cash reserve accounts or rights to future interest from serviced
assets that exceed contractually specified servicing fees) that are subject to
prepayment risk that could prevent recovery of substantially all of the
recorded amount are to be reported at fair value with the change in fair value
accounted for depending on the asset's classification as "available-for-sale"
or "trading." SFAS 125 also amends SFAS 115 to prevent a security from being
classified as held-to-maturity if the security can be prepaid or otherwise
settled in such a way that the holder of the security would not recover
substantially all of its recorded investment.
SFAS 125 is effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after December 31, 1996, and has been
applied prospectively. Also, the extension of the SFAS 115 approach to
certain nonsecurity financial assets and the amendment to SFAS 115 was
effective for financial assets held on or acquired after January 1, 1997. The
adoption of SFAS 125 did not have a material impact on the Company's
consolidated financial statements.
In February 1997, the FASB issued Statement of Financial Accounting
Standards No. 128, "Earnings per Share" (SFAS 128) which establishes standards
for computing and presenting earnings per share (EPS). SFAS 128 simplifies
standards for computing EPS and makes them comparable to international
standards. It replaces the presentation of primary EPS with a presentation of
basic EPS. It also requires dual presentation of basic and diluted EPS on the
face of the income statement for all entities with complex capital structures
and requires a reconciliation of the components of basic and diluted EPS.
Basic EPS excludes dilution and is computed by dividing income available to
common shareholders by the weighted-average number of common shares
outstanding for the period. Diluted EPS reflects the potential dilution that
could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the Company. SFAS 128 is effective
for financial statements issued for periods ending after December 31, 1997,
including interim periods, and requires restatement of all prior-period EPS
data presented. The Company does not believe the adoption of SFAS 128 will
have a material effect on its financial condition or results of operations.
In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income" (SFAS 130) which establishes
standards for reporting and display of comprehensive income and its components
in a full set of general purpose financial statements. It does not, however,
specify when to recognize or how to measure items that make up comprehensive
income. SFAS 130 was issued to address concerns over the practice of
reporting elements of comprehensive income directly in equity.
SFAS 130 requires all items that are required to be recognized under
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed in equal prominence with the other
financial statements. It does not require a specific format for that
financial statement, but requires that an enterprise display an amount
representing total comprehensive income for the period in that financial
statement. Enterprises are required to classify items of "other comprehensive
income" by their nature in the financial statement and display the balance of
other comprehensive income separately in the equity section of a statement of
financial position. It does not require per share amounts of comprehensive
income to be disclosed.
SFAS 130 is applicable to all entities that provide a full set of
financial statements consisting of a statement of financial position, results
of operations, and cash flows. SFAS 130 is effective for both interim and
annual periods beginning after December 15, 1997. Earlier application is
permitted. Comparative financial statements provided for earlier periods are
required to be reclassified to reflect the provisions of this statement.
Publicly traded enterprises that issue condensed financial statements for
interim periods are required to report a total for comprehensive income in
those financial statements. The Company does not believe the adoption of SFAS
130 will have a material effect on its financial condition or results of
operations.
The accompanying condensed consolidated financial statements include all
adjustments which in the opinion of management are necessary in order to make
those statements not misleading. Certain amounts in the 1996 condensed
consolidated financial statements have been reclassified to conform with the
1997 condensed consolidated presentation. Such reclassifications have no
effect on previously reported net income. Operating results for period ended
June 30, 1997 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1997.
It is suggested that these condensed consolidated interim financial
statements be read in conjunction with the Company's audited consolidated
financial statements included in its 1996 Annual Report to Shareholders under
the caption "Consolidated Financial Statements" and incorporated by reference
into its Annual Report on Form 10-KSB for the year ended December 31, 1996 as
Exhibit 13.
Item 2. Management's Discussion and Analysis
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE STATEMENTS MADE IN
THIS REPORT ON FORM 10-QSB ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS
AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS, FINANCIAL CONDITION, OR
BUSINESS COULD DIFFER MATERIALLY FROM ITS HISTORICAL RESULTS, FINANCIAL
CONDITION, OR BUSINESS, OR THE RESULTS OF OPERATIONS, FINANCIAL CONDITION, OR
BUSINESS CONTEMPLATED BY SUCH FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD
CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE
DISCUSSED UNDER THE CAPTION "FACTORS THAT MAY AFFECT FUTURE RESULTS OF
OPERATIONS, FINANCIAL CONDITION, OR BUSINESS," IN THE COMPANY'S ANNUAL REPORT
ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 1996, AS WELL AS THOSE
DISCUSSED ELSEWHERE IN THE COMPANY'S REPORTS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
Net income for the three months ended June 30, 1997 of $958,000 increased
$12,000 when compared to the second quarter of 1996. Earnings per common
share for the second quarter of 1997 of $1.34 increased 3 cents or 2.3% when
compared to the second quarter of 1996. Net income for the six months ended
June 30, 1997 of $1,974,000 increased $125,000 when compared to the first six
months of 1996. Earnings per common share for the six months ended June 30,
1997 of $2.75 increased 18 cents or 7.0% when compared to the first six months
of 1996.
The following table provides a comparison of fully taxable equivalent
earnings, including adjustments to interest income and tax expense for
interest on tax-exempt loans and investments.
<TABLE>
<CAPTION>
(Dollars expressed in thousands)
Three Months Six Months
Ended Ended
June 30, June 30,
_______________ _______________
1997 1996 1997 1996
_______ _______ _______ _______
<S> <C> <C> <C> <C>
Interest income $ 5,394 4,988 10,636 9,844
Fully taxable equivalent (FTE) adjustment 96 90 192 180
_______ _______ _______ _______
Interest income (FTE basis) 5,490 5,078 10,828 10,024
Interest expense 2,594 2,414 5,127 4,761
_______ _______ _______ _______
Net interest income (FTE basis) 2,896 2,664 5,701 5,263
Provision for loan losses 175 135 300 225
_______ _______ _______ _______
Net interest income after provision
for loan losses (FTE basis) 2,721 2,529 5,401 5,038
Noninterest income 475 455 910 866
Noninterest expense 1,676 1,490 3,193 2,986
_______ _______ _______ _______
Earnings before income taxes
(FTE basis) 1,520 1,494 3,118 2,918
_______ _______ _______ _______
Income taxes 466 458 952 889
FTE adjustment 96 90 192 180
_______ _______ _______ _______
Income taxes (FTE basis) 562 548 1,144 1,069
_______ _______ _______ _______
Net income $ 958 946 1,974 1,849
======= ======= ======= =======
</TABLE>
THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THREE MONTHS
ENDED JUNE 30, 1996
Net interest income on a fully taxable equivalent basis increased $232,000
or 8.7% to $2,896,000 or 4.26% of average earning assets for the second
quarter of 1997 compared to $2,664,000 or 4.10% of average earning assets for
the same period of 1996. The provision for possible loan losses for the three
months ended June 30, 1997 was $175,000 compared to $135,000 for the same
period of 1996.
<PAGE>
Noninterest income and noninterest expense for the three month periods
ended June 30, 1997 and 1996 were as follows:
<TABLE>
<CAPTION>
(Dollars expressed in thousands)
Three Months
Ended
June 30, Increase (decrease)
________________ __________________
1997 1996 Amount %
_______ _______ ________ ________
<S> <C> <C> <C> <C>
Noninterest Income
Service charges on deposit accounts $ 176 171 5 2.9 %
Trust department income 64 66 (2) (3.0)
Mortgage loan servicing fees 79 75 4 5.3
Gain on sales of mortgage loans 31 28 3 10.7
Credit card fees 82 79 3 3.8
Other 43 36 7 19.4
_______ _______ _______
$ 475 455 20 4.4 %
======= ======= =======
Noninterest Expense
Salaries, wages, and
employee benefits $ 879 847 32 3.8 %
Occupancy expense 87 69 18 26.1
Furniture and equipment expense 150 105 45 42.9
FDIC insurance assessment 7 -- 7 --
Advertising and promotion 107 67 40 59.7
Postage, printing, and supplies 101 79 22 27.8
Legal, examination, and
professional fees 76 46 30 65.2
Credit card expenses 68 71 (3) (4.2)
Credit investigation and loan
collection expenses 33 22 11 50.0
Other 168 184 (16) (8.7)
_______ _______ _______
$ 1,676 1,490 186 12.5 %
======= ======= =======
</TABLE>
Noninterest income increased $20,000 or 4.4% to $475,000 for the second
quarter of 1997 compared to $455,000 for the same period of 1996. Increases
in service charges on deposit accounts, mortgage loan servicing fees, gain on
sales of mortgage loans, credit card fees, and other noninterest income all
reflected increased volume. Loans originated and sold to the secondary market
increased from approximately $5,900,000 for the second quarter of 1996 to
approximately $7,950,000 for the second quarter of 1997.
Noninterest expense increased $186,000 or 12.5% to $1,676,000 for the
second quarter of 1997 compared to $1,490,000 for the second quarter of 1996.
The $32,000 or 3.8% increase in salaries, wages, and employee benefits
reflected merit increases of approximately 4.0% plus increases in profit
sharing expense and payroll taxes. Those increases were partially offset by a
reduction in officer staff and recruiting expense. The $18,000 or 26.1%
increase in occupancy expense primarily reflects increased costs associated
with the new East Bank building. The $45,000 or 42.9% increase in furniture
and equipment expense also reflects costs associated with the new East Bank,
including the write-off of items no longer being used, plus increases in
depreciation expense and maintenance agreements in connection with expanded
data processing capabilities. The increase in advertising and promotion
reflects updating the Bank's literature and advertising materials to conform
with the Bank's new corporate standards, continuing to build the Bank's image
throughout its trade area through measured media advertising, and increased
production costs for the promotion of a new product. Timing differences in
usage affected the variance in postage, printing, and supplies. The increase
in legal, examination, and professional fees reflects indirect costs
associated with the pending acquisition.
Income taxes as a percentage of earnings before income taxes as reported
in the condensed consolidated financial statements was 32.7% for the second
quarter of 1997 compared to 32.6% for the second quarter of 1996. After
adding a fully taxable equivalent adjustment to both income taxes and earnings
before income taxes for tax exempt income on loans and investment securities,
the fully taxable equivalent ratios of income taxes as a percentage of
earnings before income taxes were 37.0% for the second quarter of 1997 and
36.7% for the second quarter of 1996.
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS
ENDED JUNE 30, 1996
Net interest income on a fully taxable equivalent basis increased $438,000
or 8.3% to $5,701,000 or 4.23% of average earning assets for the first six
months of 1997 compared to $5,263,000 or 4.11% of average earning assets for
the same period of 1996. The provision for possible loan losses for the six
months ended June 30, 1997 was $300,000 compared to $225,000 for the same
period of 1996.
Noninterest income and noninterest expense for the six month periods ended
June 30, 1997 and 1996 were as follows:
<TABLE>
<CAPTION>
(Dollars expressed in thousands)
Six Months
Ended
June 30, Increase (decrease)
________________ __________________
1997 1996 Amount %
_______ _______ ________ ________
<S> <C> <C> <C> <C>
Noninterest Income
Service charges on deposit accounts $ 347 332 15 4.5 %
Trust department income 92 92 -- --
Mortgage loan servicing fees 155 144 11 7.6
Gain on sales of mortgage loans 53 62 (9) (14.5)
Net loss on sales and calls
of debt securities (3) -- (3) --
Credit card fees 180 165 15 9.1
Other 86 71 15 21.1
_______ _______ _______
$ 910 866 44 5.1 %
======= ======= =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(Dollars expressed in thousands)
Six Months
Ended
June 30, Increase (decrease)
________________ __________________
1997 1996 Amount %
_______ _______ ________ ________
<S> <C> <C> <C> <C>
Noninterest Expense
Salaries, wages, and
employee benefits $ 1,745 1,708 37 2.2 %
Occupancy expense 159 139 20 14.4
Furniture and equipment expense 270 207 63 30.4
FDIC insurance assessment 14 1 13 1,300.0
Advertising and promotion 142 114 28 24.6
Postage, printing, and supplies 172 160 12 7.5
Legal, examination, and
professional fees 145 118 27 22.9
Credit card expenses 151 144 7 4.9
Credit investigation and loan
collection expenses 65 46 19 41.3
Other 330 349 (19) (5.4)
_______ _______ _______
$ 3,193 2,986 207 6.9 %
======= ======= =======
</TABLE>
Noninterest income increased $44,000 or 5.1% to $910,000 for the first six
months of 1997 compared to $866,000 for the same period of 1996. Increases in
service charges on deposit accounts, mortgage loan servicing fees, credit card
fees, and other noninterest income all reflected increased volume. Gains on
sales of mortgage loans decreased $9,000 due to a decrease in volume of loans
originated and sold to the secondary market from approximately $12,100,000 for
the first six months of 1996 to approximately $9,100,000 for the first six
months of 1997. Net loss on sales and calls of debt securities reflected a
$3,600 loss on the partial call of an available-for-sale municipal security
which was offset in part by an $800 net gain on the sale of several
available-for-sale mortgage-backed securities pools which had paid down to
insignificant remaining balances.
Noninterest expense increased $207,000 or 6.9% to $3,193,000 for the first
six months of 1997 compared to $2,986,000 for the first six months of 1996.
The $37,000 or 2.2% increase in salaries, wages, and employee benefits
reflected merit increases of approximately 4.0% plus increases in profit
sharing expense and payroll taxes. Those increases were partially offset by a
reduction in officer staff and recruiting expense. The $20,000 or 14.4%
increase in occupancy expense primarily reflects increased costs associated
with the new East Bank building. The $63,000 or 30.4% increase in furniture
and equipment expense also reflects costs associated with the new East Bank,
including the write-off of items no longer being used, plus increases in
depreciation expense and maintenance agreements in connection with expanded
data processing capabilities. The increase in FDIC insurance assessment
reflects the fact that in 1997 the Company is now assessed by the Financing
Corporation for Savings Association Insurance Fund at an annual rate 1.296%
per $100 of deposits. For the first six months of 1996 the Company was
assessed at the minimum FDIC assessment level of $1,000 in effect at that
time. The increase in advertising and promotion reflects updating the Bank's
literature and advertising materials to conform with the Bank's new corporate
standards plus continuing to build the Bank's image throughout its trade area
through measured media advertising. The increase in legal, examination, and
professional fees reflects indirect costs associated with the pending
acquisition.
Income taxes as a percentage of earnings before income taxes as reported
in the condensed consolidated financial statements was 32.5% for both the
first six months of 1997 and the first six months of 1996. After adding a
fully taxable equivalent adjustment to both income taxes and earnings before
income taxes for tax exempt income on loans and investment securities, the
fully taxable equivalent ratios of income taxes as a percentage of earnings
before income taxes were 36.7% for the first six months of 1997 and 36.6% for
the first six months of 1996.
NET INTEREST INCOME
The increases in fully taxable equivalent net interest income for the
three and six month periods ended June 30, 1997 primarily reflect growth in
average total loans outstanding.
The following tables present average balance sheets, net interest income,
average yields of earning assets, and average costs of interest bearing
liabilities on a fully taxable equivalent basis for the three and six month
periods ended June 30, 1997 and 1996.
<PAGE>
<TABLE>
<CAPTION>
(Dollars expressed in thousands)
Three Months Ended Three Months Ended
June 30, 1997 June 30, 1996
___________________________ ___________________________
Interest Rate Interest Rate
Average Income/ Earned/ Average Income/ Earned/
Balance Expense/1/ Paid/1/ Balance Expense/1/ Paid/1/
________ __________ _______ ________ __________ _______
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Loans:/2/
Commercial $ 44,770 $1,014 9.08% $ 40,712 $ 912 9.01%
Real estate 104,280 2,276 8.75 86,963 1,918 8.87
Consumer 34,884 795 9.14 32,764 757 9.29
Money market/3/ 1,591 22 5.55 -- -- --
Investment
securities:/4/
U.S. Treasury and
U.S. Government
agencies 63,468 952 6.02 63,769 897 5.66
State and municipal 17,142 331 7.74 15,347 298 7.81
Other 1,607 27 6.74 3,200 50 6.28
Federal funds sold 5,250 73 5.58 18,822 246 5.26
________ ______ ________ ______
Total interest
earning assets 272,992 5,490 8.07 261,577 5,078 7.81
All other assets 18,836 16,255
Allowance for loan
losses (2,341) (2,274)
________ ________
Total assets $289,487 $275,558
======== ========
</TABLE>
Continued on next page
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
June 30, 1997 June 30, 1996
___________________________ ___________________________
Interest Rate Interest Rate
Average Income/ Earned/ Average Income/ Earned/
Balance Expense/1/ Paid/1/ Balance Expense/1/ Paid/1/
________ __________ _______ ________ __________ _______
<S> <C> <C> <C> <C> <C> <C>
LIABILITIES
AND STOCKHOLDERS'
EQUITY
NOW accounts $ 28,008 $ 187 2.68% $ 28,402 $ 189 2.68%
Savings 22,547 221 3.93 22,260 218 3.94
Money market 32,083 333 4.16 31,514 327 4.17
Deposits of
$100,000 and over 13,140 179 5.46 8,198 108 5.30
Other time deposits 100,174 1,427 5.71 93,095 1,341 5.79
________ ______ ________ ______
Total time deposits 195,952 2,347 4.80 183,469 2,183 4.79
Securities sold under
agreements to
repurchase 17,277 234 5.43 18,662 221 4.76
Interest-bearing
demand notes
to U.S. Treasury 1,313 13 3.97 717 10 5.61
________ ______ ________ ______
Total interest-
bearing
liabilities 214,542 2,594 4.85 202,848 2,414 4.79
______ ______
Demand deposits 31,382 31,794
Other liabilities 1,930 1,796
________ ________
Total liabilities 247,854 236,438
Stockholders' equity 41,633 39,120
________ ________
Total liabilities
and stockholders'
equity $289,487 $275,558
======== ========
Net interest income $ 2,896 $ 2,664
======= =======
Net interest margin 4.26% 4.10%
__________ ==== ====
/1/ Interest income and yields are presented on a fully taxable equivalent
basis using the Federal statutory income tax rate of 34%, net of
nondeductible interest expense. Such adjustments were $96,000 in 1997 and
$90,000 in 1996.
/2/ Non-accruing loans are included in the average amounts outstanding.
/3/ Includes banker's acceptances and commercial paper.
/4/ Average balances based on amortized cost.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(Dollars expressed in thousands)
Six Months Ended Six Months Ended
June 30, 1997 June 30, 1996
___________________________ ___________________________
Interest Rate Interest Rate
Average Income/ Earned/ Average Income/ Earned/
Balance Expense/1/ Paid/1/ Balance Expense/1/ Paid/1/
________ __________ _______ ________ __________ _______
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Loans:/2/
Commercial $ 43,361 $1,945 9.05% $ 39,350 $1,776 9.08%
Real estate 102,560 4,448 8.75 86,201 3,831 8.94
Consumer 34,528 1,571 9.18 31,979 1,471 9.25
Money market/3/ 1,449 39 5.43 -- -- --
Investment
securities:/4/
U.S. Treasury and
U.S. Government
agencies 64,030 1,915 6.03 61,302 1,724 5.66
State and municipal 17,037 657 7.78 15,222 593 7.83
Other 1,956 67 6.91 3,204 101 6.34
Federal funds sold 6,887 185 5.42 19,994 528 5.31
Interest-bearing
deposits 49 1 4.12 -- -- --
________ ______ ________ ______
Total interest
earning assets 271,857 10,828 8.03 257,252 10,024 7.84
All other assets 18,432 16,618
Allowance for loan
losses (2,331) (2,246)
________ ________
Total assets $287,958 $271,624
======== ========
</TABLE>
Continued on next page
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended Six Months Ended
June 30, 1997 June 30, 1996
___________________________ ___________________________
Interest Rate Interest Rate
Average Income/ Earned/ Average Income/ Earned/
Balance Expense/1/ Paid/1/ Balance Expense/1/ Paid/1/
________ __________ _______ ________ __________ _______
<S> <C> <C> <C> <C> <C> <C>
LIABILITIES
AND STOCKHOLDERS'
EQUITY
NOW accounts $ 28,371 $ 375 2.67% $ 28,550 $ 380 2.68%
Savings 22,736 446 3.96 21,863 429 3.95
Money market 32,264 667 4.17 31,079 646 4.18
Deposits of
$100,000 and over 13,600 368 5.46 7,755 206 5.34
Other time deposits 99,459 2,825 5.73 92,107 2,665 5.82
________ ______ ________ ______
Total time deposits 196,430 4,681 4.81 181,354 4,326 4.80
Securities sold under
agreements to
repurchase 16,486 424 5.19 17,741 415 4.70
Interest-bearing
demand notes
to U.S. Treasury 1,009 22 4.40 744 20 5.41
________ ______ ________ ______
Total interest-
bearing
liabilities 213,925 5,127 4.83 199,839 4,761 4.79
______ ______
Demand deposits 30,770 31,151
Other liabilities 1,913 1,726
________ ________
Total liabilities 246,608 232,716
Stockholders' equity 41,350 38,908
________ ________
Total liabilities
and stockholders'
equity $287,958 $271,624
======== ========
Net interest income $ 5,701 $ 5,263
======= =======
Net interest margin 4.23% 4.11%
__________ ==== ====
/1/ Interest income and yields are presented on a fully taxable equivalent
basis using the Federal statutory income tax rate of 34%, net of
nondeductible interest expense. Such adjustments were $192,000 in 1997
and $180,000 in 1996.
/2/ Non-accruing loans are included in the average amounts outstanding.
/3/ Includes banker's acceptances and commercial paper.
/4/ Average balances based on amortized cost.
</TABLE>
<PAGE>
The following tables present, on a fully taxable equivalent basis, analyses
of changes in net interest income resulting from changes in average volumes of
earning assets and interest bearing liabilities and average rates earned and
paid. The change in interest due to the combined rate/volume variance has
been allocated to rate and volume changes in proportion to the absolute dollar
amounts of change in each.
<TABLE>
<CAPTION>
(Dollars expressed in thousands)
Three Months Ended June
30, 1997 Compared to Three
Months Ended June 30, 1996
_______________________________
Change due to
Total ____________________
Change Volume Rate
________ ________ _________
<S> <C> <C> <C>
Interest income on a fully
taxable equivalent basis:
Loans: /1/
Commercial $ 102 92 10
Real estate /2/ 358 378 (20)
Consumer 38 48 (10)
Money market 22 22 --
Investment securities:
U.S. Treasury and U.S.
Government agencies 55 (4) 59
State and municipal /2/ 33 35 (2)
Other (23) (27) 4
Federal funds sold (173) (188) 15
_______ _______ ________
Total interest income 412 356 56
Interest expense:
NOW accounts (2) (3) 1
Savings 3 3 --
Money market 6 6 --
Deposits of
$100,000 and over 71 67 4
Other time deposits 86 101 (15)
Securities sold under
agreements to repurchase 13 (18) 31
Interest-bearing demand
notes to U.S. Treasury 3 7 (4)
_______ _______ ________
Total interest expense 180 163 17
_______ _______ ________
Net interest income on a fully
taxable equivalent basis $ 232 193 39
___________ ======= ======= ========
/1/ Non-accruing loans are included in the average amounts outstanding.
/2/ Interest income and yields are presented on a fully taxable equivalent
basis using the federal statutory income tax rate of 34%, net of
nondeductible interest expense. Such adjustments totaled $96,000 in 1997
and $90,000 in 1996.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(Dollars expressed in thousands)
Six Months Ended June
30, 1997 Compared to Six
Months Ended June 30, 1996
_______________________________
Change due to
Total ____________________
Change Volume Rate
________ ________ _________
<S> <C> <C> <C>
Interest income on a fully
taxable equivalent basis:
Loans: /1/
Commercial $ 169 180 (11)
Real estate /2/ 617 711 (94)
Consumer 100 116 (16)
Money market 39 39 --
Investment securities:
U.S. Treasury and U.S.
Government agencies 191 79 112
State and municipal /2/ 64 70 (6)
Other (34) (42) 8
Federal funds sold (343) (352) 9
Interest-bearing deposits 1 1 --
_______ _______ ________
Total interest income 804 802 2
Interest expense:
NOW accounts (5) (2) (3)
Savings 17 17 --
Money market 21 25 (4)
Deposits of
$100,000 and over 162 158 4
Other time deposits 160 210 (50)
Securities sold under
agreements to repurchase 9 (30) 39
Interest-bearing demand
notes to U.S. Treasury 2 6 (4)
_______ _______ ________
Total interest expense 366 384 (18)
_______ _______ ________
Net interest income on a fully
taxable equivalent basis $ 438 418 20
___________ ======= ======= ========
/1/ Non-accruing loans are included in the average amounts outstanding.
/2/ Interest income and yields are presented on a fully taxable equivalent
basis using the federal statutory income tax rate of 34%, net of
nondeductible interest expense. Such adjustments totaled $192,000 in
1997 and $180,000 in 1996.
</TABLE>
Provision and Allowance for Loan Losses
The provision for loan losses is based on management's evaluation of the
loan portfolio in light of national and local economic conditions, changes in
the composition and volume of the loan portfolio, changes in the volume of
past due and nonaccrual loans, and other relevant factors. The allowance for
loan losses which is reported as a deduction from loans, is available for loan
charge-offs. The allowance is increased by the provision charged to expense
and is reduced by loan charge-offs net of loan recoveries.
Management formally reviews all loans in excess of certain dollar amounts
(periodically established) at least annually. In addition, on a monthly
basis, management reviews past due, "classified", and "watch list" loans in
order to classify or reclassify loans as "loans requiring attention,"
"substandard," "doubtful," or "loss". During that review, management also
determines what loans should be considered to be "impaired". Management
believes, but there can be no assurance, that these procedures keep management
informed of possible problem loans. Based upon these procedures, both the
allowance and provision for loan losses are adjusted to maintain the allowance
at a level considered adequate by management for estimated losses inherent in
the loan portfolio. See additional discussion concerning nonperforming loans
under "Financial Condition."
The allowance for loan losses was reduced by net loan charge-offs of
$85,933 for the first quarter of 1997 and $270,114 for the second quarter of
1997. That compares to net charge-offs of $26,301 for the first quarter of
1996 and $75,480 for the second quarter of 1996. The allowance for loan
losses was increased by a provision charged to expense of $125,000 for the
first quarter of 1997 and $175,000 for the second quarter of 1997. That
compares to $90,000 for the first quarter of 1996 and $135,000 for the second
quarter of 1996.
The balance of the allowance for loan losses was $2,251,021 at June 30,
1997 compared to $2,307,068 at December 31, 1996 and $2,302,228 at June 30,
1996. The allowance for loan losses as a percent of outstanding loans was
1.20% at June 30, 1997 compared to 1.33% at December 31, 1996 and 1.41% at
June 30, 1996.
FINANCIAL CONDITION
Total assets increased $9,171,295 or 3.2% to $293,250,730 at June 30, 1997
compared to $284,079,435 at December 31, 1996. Total liabilities increased
$7,891,537 or 3.2% to $251,289,670 and stockholders' equity increased
$1,279,758 or 3.1% to $41,961,060.
Loans, net of unearned income, increased $13,614,992 or 7.9% to
$186,923,717 at June 30, 1997 compared to $173,308,725 at December 31, 1996.
Commercial loans increased $4,705,793 or 11.7%; Real estate construction loans
increased $5,451,866 or 24.0%; real estate mortgage loans increased $1,617,271
or 2.1%; and consumer loans increased $1,840,062 or 5.4%.
Nonperforming loans, defined as loans 90 days or more past due and loans
on nonaccrual status, totaled $808,000 or 0.43% of total loans at June 30,
1997 compared to $1,092,000 or 0.63% of total loans at December 31, 1996.
Detail of those balances plus other real estate and repossessions is as
follows:
<TABLE>
<CAPTION>
(Dollars expressed in thousands)
June 30, 1997 December 31, 1996
_________________ _________________
% of % of
Gross Gross
Balance Loans Balance Loans
_______ _____ _______ _____
<S> <C> <C> <C> <C>
Loans 90 days or more
past due -
Commercial $ 59 .03% $ 59 .03%
Real Estate:
Construction 122 .07 122 .07
Mortgage 5 -- 186 .11
Consumer 20 .01 27 .02
______ ____ ______ ____
206 .11 394 .23
______ ____ ______ ____
Loans on nonaccrual
status -
Commercial 40 .02 42 .02
Real Estate:
Construction 322 .17 327 .19
Mortgage 219 .12 268 .15
Consumer 21 .01 61 .04
______ ____ ______ ____
602 .32 698 .40
______ ____ ______ ____
Total nonperforming loans 808 .43% 1,092 .63%
Other real estate 422 ==== 22 ====
Repossessions 88 106
______ ______
Total nonperforming assets $1,318 $1,220
====== ======
</TABLE>
The allowance for loan losses was 278.59% of nonperforming loans at June
30, 1997 compared to 211.26% of nonperforming loans at December 31, 1996. The
June 30, 1997 balances of commercial, real estate, and consumer loans 90 days
or more past due reflect one, two, and five loans, respectively, all of which
are well secured and in the process of collection. The June 30, 1997 balances
of commercial, real estate, and consumer loans on nonaccrual status reflect
loans to one, five, and five borrowers, respectively. The commercial loan on
nonaccrual status at June 30, 1997 is 90% guaranteed by the Small Business
Administration.
It is the Company's policy to discontinue the accrual of interest income
on loans when the full collection of interest or principal is in doubt, or
when the payment of interest or principal has become contractually 90 days
past due unless the obligation is both well secured and in the process of
collection. A loan remains on nonaccrual status until the loan is current as
to payment of both principal and interest and/or the borrower demonstrates the
ability to pay and remain current. Interest on loans on nonaccrual status at
June 30, 1997 and 1996, which would have been recorded under the original
terms those loans, was approximately $28,000 and $36,000 for the six months
ended June 30, 1997 and 1996, respectively. Approximately $9,000 and $8,000
was actually recorded as interest income on such loans for the six months
ended June 30, 1997 and 1996, respectively.
The increase in other real estate from December 31, 1996 primarily
reflects real estate which was acquired by the Company in lieu of foreclosure
from a borrower in the construction business. Second quarter 1997 loan losses
relating to that borrower were approximately $221,000.
A loan is considered "impaired" when it is probable a creditor will be
unable to collect all amounts due - both principal and interest - according to
the contractual terms of the loan agreement. In addition to nonaccrual loans
at June 30, 1997 included in the table above, which were considered
"impaired", management has identified additional loans totaling approximately
$3,748,000 which are not included in the nonaccrual table above but are
considered by management to be "impaired". Approximately $3,034,000 of those
loans represented commercial and real estate loans to a group of borrowers
that operate in an industry that has experienced some adverse economic trends
due to change in that industry's regulatory environment. Management believes
that the loans are well secured and all have performed according to their
contractual terms during the first six months of 1997. Another approximately
$408,000 of the $3,748,000 of "impaired" loans represented commercial and real
estate loans to a commercial retail operation that has experienced cash flow
problems. The remainder of loans identified by management as being "impaired"
reflected commercial loans to three borrowers totaling approximately $182,000,
one real estate loan totaling approximately $41,000, and eleven consumer loans
totaling approximately $83,000. The average balance of "impaired" loans for
the first six months of 1997 was approximately $5,225,000. At June 30, 1997
the allowance for loan losses on impaired loans was $180,930 compared to
$277,149 at December 31, 1996.
As of June 30, 1997 approximately $1,849,000 of additional loans not
included in the nonaccrual table or identified by management as being
"impaired" were classified by management as having potential credit problems
which raised doubts as to the ability of the borrower to comply with present
loan repayment terms. Of the $1,849,000 of "classified" loans at June 30,
1997, $144,000 represented two commercial loans; $1,321,000 represented eight
real estate loans ranging in size from approximately $52,000 to $445,000; and
$384,000 represented forty installment loans to individuals.
Investments in debt and equity securities classified as available-for-sale
increased $932,139 or 1.8% to $51,955,973 at June 30, 1997 compared to
$51,023,834 at December 31, 1996. Investments classified as
available-for-sale are carried at fair value. At December 31, 1996 the market
valuation account for the available-for-sale investments of $24,875 decreased
the amortized cost of those investments to their fair value on that date and
the net after tax increase resulting from the market valuation adjustment of
$15,671 was reflected as a separate negative component of stockholders'
equity. During 1997, the market valuation account was decreased $29,642 to a
negative balance of $54,517 to reflect the fair value of available-for-sale
investments at June 30, 1997 and the net after tax decrease resulting from the
change in the market valuation adjustment of $18,675 decreased the
stockholders' equity component to a negative balance of $34,346 at June 30,
1997. The decrease in fair value compared to amortized cost resulted from an
increase in current market rates from December 31, 1996 to June 30, 1997.
Investments in debt securities classified as held-to-maturity increased
$276,043 or 0.9% to $29,875,580 at June 30, 1997 compared to $29,599,537 at
December 31, 1996. Investments classified as held-to-maturity are carried at
amortized cost. At June 30, 1997 and December 31, 1996 the aggregate fair
value of the Company's held-to-maturity investment portfolio was approximately
$115,000 and $60,000, respectively, more than its aggregate carrying value.
Cash and cash equivalents, which consist of cash and due from banks and
Federal funds sold, decreased $7,425,403 or 29.5% to $17,746,238 at June 30,
1997 compared to $25,171,641 at December 31, 1996.
Premises and equipment increased $1,260,553 or 37.7% to $4,602,203 at June
30, 1997 compared to $3,341,650 at December 31, 1996. The increase reflected
expenditures for premises and equipment of $1,446,417 less depreciation
expense of $152,680 and a net loss on disposition of fixed assets of $33,184.
The expenditures for premises and equipment reflected approximately $714,000
in construction costs for a permanent East Bank facility and approximately
$545,000 in progress payments towards the renovation and expansion of the
Company's main bank building located in downtown Jefferson City. The
renovation and expansion project is expected to continue on into 1998 and its
cost is anticipated to be no more than $4,000,000.
Total deposits increased $3,092,015 or 1.4% to $231,115,787 at June 30,
1997 compared to $228,023,772 at December 31, 1996 due primarily to normal
fluctuations in demand deposits. Average demand deposits decreased
approximately 1.2% for the first six months of 1997 compared to the first six
months of 1996.
Securities sold under agreements to repurchase increased $2,104,801 to
$14,408,192 at June 30, 1997 compared to $12,303,391 at December 31, 1996 due
primarily to funds obtained from a local hospital, and the Missouri Department
of Corrections.
The increase in stockholders' equity reflects net income of $1,973,833
less dividends declared of $675,400, and $18,675 in unrealized holding losses
on investments in debt and equity securities available-for-sale.
As previously discussed, the Company's total loans increased over
$13,600,000 from December 31, 1997 to June 30, 1997. Funding for most of that
growth came from a reduction in federal funds sold, which had the effect of
reducing what management believes was excess on balance sheet liquidity.
Management is confident that established credit lines continue to provide the
Company with sufficient liquidity for unusual occurrences.
No material changes in the Company's capital resources have occurred since
December 31, 1996.
PART II - OTHER INFORMATION
Item 4. At the annual meeting of the shareholders of Exchange National
Bancshares, Inc. held on June 11, 1997, the shareholders re-elected
two Class II Directors, namely, David R. Goller and James R. Loyd,
and ratified the Board of Directors selection of KPMG Peat Marwick
LLP as the Company's independent auditors for the year ending
December 31, 1997. Class III Directors, namely, Donald L. Campbell,
Kevin L. Riley, and David T. Turner, and Class I Directors, namely,
Charles G. Dudenhoeffer, Jr. and Philip D. Freeman, continue to serve
terms expiring at the annual meetings of shareholders in 1998 and
1999, respectively.
The following is a summary of votes cast. No broker non-votes
were received.
Withhold
Authority/
For Against Abstentions
_________ ____________ ___________
Election of Directors:
David R. Goller 546,948 569 N/A
James R. Loyd 547,467 50 N/A
Ratification of KPMG Peat
Marwick LLP as
independent auditors 546,867 10 640
N/A = not applicable
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit No. Description
3.1 Articles of Incorporation of the Company (filed as
Exhibit 3(a) to the Company's Registration Statement on
Form S-4 (Registration No. 33-54166) and incorporated
herein by reference).
3.2 Bylaws of the Company (filed as Exhibit 3(b) to the
Company's Registration Statement on Form S-4
(Registration No. 33-54166) and incorporated herein by
reference).
4 Specimen certificate representing shares of the
Company's $1.00 par value common stock (filed as Exhibit
4 to the Company's Registration Statement on Form S-4
(Registration No. 33-54166) and incorporated herein by
reference).
27 Financial Data Schedule
(b) Reports on Form 8-K.
No reports on Form 8-K have been filed during the second quarter of
1997.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
EXCHANGE NATIONAL BANCSHARES, INC.
Date By /s/ Donald L. Campbell
___________________________________
Donald L. Campbell, Chairman of the
Board of Directors, President and
August 11, 1997 Principal Executive Officer
By /s/ Carl A. Brandenburg, Sr.
___________________________________
Carl A. Brandenburg, Sr., Treasurer
August 11, 1997 and Chief Financial Officer
<PAGE>
EXCHANGE NATIONAL BANCSHARES, INC.
INDEX TO EXHIBITS
June 30, 1997 Form 10-QSB
Exhibit No. Description Page No.
3.1 Articles of Incorporation of the Company (filed as
Exhibit 3(a) to the Company's Registration Statement
on Form S-4 (Registration No. 33-54166) and
incorporated herein by reference). **
3.2 Bylaws of the Company (filed as Exhibit 3(b) to the
Company's Registration Statement on Form S-4
(Registration No. 33-54166) and incorporated herein
by reference). **
4 Specimen certificate representing shares of the
Company's $1.00 par value common stock (filed as
Exhibit 4 to the Company's Registration Statement on
Form S-4 (Registration No. 33-54166) and incorporated
herein by reference). **
27 Financial Data Schedule 28
** Incorporated by reference.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S QUARTERLY REPORT ON FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED JUNE
30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000893847
<NAME> EXCHANGE NATIONAL BANCSHARES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 17,191
<INT-BEARING-DEPOSITS> 55
<FED-FUNDS-SOLD> 500
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 51,956
<INVESTMENTS-CARRYING> 29,876
<INVESTMENTS-MARKET> 29,990
<LOANS> 186,924
<ALLOWANCE> 2,251
<TOTAL-ASSETS> 293,251
<DEPOSITS> 231,116
<SHORT-TERM> 18,006
<LIABILITIES-OTHER> 2,168
<LONG-TERM> 0
0
0
<COMMON> 719
<OTHER-SE> 41,242
<TOTAL-LIABILITIES-AND-EQUITY> 293,251
<INTEREST-LOAN> 7,990
<INTEREST-INVEST> 2,460
<INTEREST-OTHER> 186
<INTEREST-TOTAL> 10,636
<INTEREST-DEPOSIT> 4,681
<INTEREST-EXPENSE> 5,127
<INTEREST-INCOME-NET> 5,509
<LOAN-LOSSES> 300
<SECURITIES-GAINS> (3)
<EXPENSE-OTHER> 3,193
<INCOME-PRETAX> 2,926
<INCOME-PRE-EXTRAORDINARY> 1,974
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,974
<EPS-PRIMARY> 2.75
<EPS-DILUTED> 2.75
<YIELD-ACTUAL> 4.23
<LOANS-NON> 602
<LOANS-PAST> 206
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 5,597
<ALLOWANCE-OPEN> 2,307
<CHARGE-OFFS> 439
<RECOVERIES> 83
<ALLOWANCE-CLOSE> 2,251
<ALLOWANCE-DOMESTIC> 1,730
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 521
</TABLE>
